2022 (3) TMI 1502 - HC - GST

Blocking electronic credit ledger of the petitioner - Challenge to blocking order on the ground that the period of validity of such blocking is one year only as per sub-rule (3) of rule 86A of the Central Goods and Services Tax Rules, 2017 - It is submitted on behalf of the petitioner that one year has already expired from the date of blocking of the electronic credit ledger - HELD THAT - This writ petition is disposed of by declaring that the impugned order of blocking of the electronic credit ledger of the petitioner has lost its force and cannot be continued now as per sub-rule (3) of rule 86A of the 2017 Rules and the legal consequence will follow automatically. Application disposed off.

Summary

Issues:
Challenge to impugned order of blocking electronic credit ledger based on the validity period.

Analysis:
The petitioner challenged the impugned order of blocking the electronic credit ledger, arguing that the validity period of such blocking is one year as per sub-rule (3) of rule 86A of the Central Goods and Services Tax Rules, 2017. The petitioner contended that one year had already passed since the blocking, and therefore, the respondents should unblock the ledger as the validity of the blocking had expired. The advocate for the respondents confirmed that no further extension order had been passed regarding the blocking in question.

The High Court, after considering the submissions of both parties and the facts on record, declared that the impugned order of blocking the electronic credit ledger had lost its force. The court held that as per sub-rule (3) of rule 86A of the 2017 Rules, the blocking could not continue after the expiry of the one-year validity period. Consequently, the legal consequence of the expired blocking would follow automatically. The court disposed of the writ petition and connected applications, thereby providing relief to the petitioner regarding the unblocking of the electronic credit ledger.

This judgment highlights the importance of adhering to the specified validity period for blocking electronic credit ledgers under the GST Rules. It underscores the legal consequence of such blocking expiring after the prescribed duration and the obligation of the authorities to comply with the rule provisions. The court's decision ensures that the petitioner's rights are upheld in accordance with the relevant legal framework governing electronic credit ledger blocking.